Business R&D Performance in the United States Increased in 2011

Companies spent $294 billion on research and development performed in the United States during 2011, compared with $279 billion during 2010 (table 1). Funding from the companies’ own sources was $222 billion during 2010 and $239 billion during 2011; funding from other sources was $57 billion in 2010 and $55 billion in 2011 (table 2). Data for this InfoBrief are from the Business R&D and Innovation Survey (BRDIS), which was developed and cosponsored by the National Science Foundation and Census Bureau.

TABLE 1. Funds spent for business R&D performed in the United States, by source of funds and size of company: 2010–11(Millions of U.S. dollars)

Selected characteristic

2010

2011

Domestic R&D performancea

278,977

294,093

Source of funds

Paid for by the company

221,706

238,768

Paid for by others

57,271

55,324

Federal

34,199

i

31,309

i

Otherb

23,072

24,015

Size of company (number of domestic employees)

5–24

12,573

10,981

25–49

8,625

10,861

50–99

8,855

9,468

100–249

11,866

12,528

250–499

10,283

12,955

500–999

10,117

10,027

1,000–4,999

48,228

50,485

5,000–9,999

27,463

24,951

10,000–24,999

41,835

49,214

25,000 or more

99,133

102,623

i = > 50% of value imputed.

a For companies located in the United States that performed or funded R&D.b Includes companies located inside and outside the United States, U.S. state government agencies and laboratories, foreign government agencies and laboratories, and all other organizations located inside and outside the United States.

NOTES: Detail may not add to total because of rounding. Excludes data for federally funded research and development centers. Business R&D and Innovation Survey does not include companies with fewer than five employees.

SOURCE: National Science Foundation, National Center for Science and Engineering Statistics, Business R&D and Innovation Survey.

a Includes foreign parent companies of U.S. subsidiaries.b Includes U.S. state government agencies and laboratories, foreign government agencies and laboratories, and all other organizations located inside and outside the United States.c Includes companies located in the United States that performed or funded R&D.

NOTES: Detail may not add to total because of rounding. Industry classification was based on dominant business code for domestic R&D performance where available. For companies that did not report business codes, classification used for sampling was assigned. Excludes data for federally funded research and development centers.

SOURCE: National Science Foundation, National Center for Science and Engineering Statistics, Business R&D and Innovation Survey.

R&D Performance by Industrial Sector and Source of Funding

During 2011, companies in manufacturing industries performed $201 billion (68%) of domestic R&D, defined as R&D performed in the 50 states and the District of Columbia (table 2). Most of the funding was from companies’ own funds (81%). Companies in nonmanufacturing industries performed $93 billion of domestic R&D (32% of total domestic R&D performance), 81% of which was paid for from companies’ own funds. The U.S. federal government was the chief source of outside funding (also referred to as R&D paid for by others) for R&D across all industries. Of the $55 billion paid for by others, the federal government contributed $31 billion, most of which came from the Department of Defense ($26 billion) (data not shown). Aerospace products and parts (North American Industry Classification System [NAICS] 3364), professional, scientific, and technical services (NAICS 54), and computer and electronic products (NAICS 334) received 92% of federal government R&D funding. Next among funders were foreign companies, including foreign parent companies of U.S. subsidiaries ($12 billion) and other U.S. companies ($11 billion) (table 2) (see “Survey Information and Data Availability” for information on industry classification).

Sales, R&D Intensity, and Employment of R&D Performers

U.S. companies that performed or funded R&D reported domestic net sales of $9 trillion in 2011 (table 3).[2] For all industries, the R&D intensity (ratio of domestic R&D performance to domestic net sales) was 3.2%; for manufacturers, 3.9%; and for nonmanufacturers, 2.3%. Manufacturing industries with high levels of R&D intensity in 2011 were pharmaceuticals and medicines (NAICS 3254) (11.8%), aerospace products and parts (NAICS 3364) (11.3%), and computer and electronic products (NAICS 334) (9.9%). Among the nonmanufacturing industries, industries with high levels of R&D intensity were scientific R&D services (NAICS 5417) (24.4%), software publishers (NAICS 5112) (9.5%), and computer system design and related services (NAICS 5415) (7.8%).

TABLE 3. Sales and employment for companies that performed or funded business R&D, by selected industry and company size: 2011

a Includes domestic net sales of companies that perform or fund R&D, transfers to foreign subsidiaries, and export sales to foreign companies; excludes intracompany transfers and sales by foreign subsidiaries.b R&D intensity = domestic R&D performance/domestic net sales. c Data recorded on 12 March represent employment figures for the year. d Includes scientists and engineers and their managers, as well as technicians, technologists, and support staff. e Includes companies located in the United States that performed or funded R&D.

NOTES: Detail may not add to total because of rounding. Industry classification was based on dominant business code for domestic R&D performance where available. For companies that did not report business codes, classification used for sampling was assigned. Excludes data for federally funded research and development centers. Business R&D and Innovation Survey does not include companies with fewer than five employees.

SOURCE: National Science Foundation, National Center for Science and Engineering Statistics, Business R&D and Innovation Survey, 2011.

Businesses that performed or funded R&D employed 19.3 million people in the United States during 2011. Some 1.5 million (7.6%) were R&D employees.[3] Not surprisingly, manufacturing industries with high numbers of R&D employees in 2011 were computer and electronic products (NAICS 334) (258,000 R&D employees), pharmaceuticals and medicines (NAICS 3254) (107,000), and aerospace products and parts (NAICS 3364) (72,000). Nonmanufacturing industries with high numbers of R&D employees were software publishers (NAICS 5112) (143,000), computer systems design and related services (NAICS 5415) (103,000), and scientific R&D services (NAICS 5417) (73,000) (table 3).

R&D Performance by State

During 2011, companies reported $239 billion of domestic R&D paid for by the company. Businesses in California alone accounted for 26.8% of this amount in 2011 (table 4). Other states with large amounts of company-funded business R&D, as reflected by the percentages of the national total they accounted for in 2011, were Connecticut (2.6%), Illinois (4.5%), Massachusetts (5.3%), Michigan (5.1%), New Jersey (5.0%), New York (3.8%), Pennsylvania (3.8%), Texas (5.4%), and Washington (5.7%).

TABLE 4. Funds spent for business R&D performed in the United States, by source of funds and state: 2011 (Millions of U.S. dollars)

State

All R&D

Paid for by the company

Paid for by others

United Statesa

294,093

238,768

55,324

Alabama

1,879

835

1,045

Alaska

84

e

52

e

33

Arizona

4,931

3,776

1,155

Arkansas

344

307

38

California

75,035

64,104

10,931

Colorado

4,310

3,642

668

Connecticut

7,504

6,272

1,232

Delaware

2,097

1,453

643

District of Columbia

415

162

e

253

i

Florida

5,988

3,855

2,133

i

Georgia

3,839

3,303

536

Hawaii

252

183

69

Idaho

1,171

871

301

Illinois

12,038

10,764

1,275

Indiana

6,158

5,484

674

i

Iowa

2,314

1,736

578

Kansas

1,509

1,037

472

Kentucky

1,278

1,017

261

Louisiana

459

382

77

i

Maine

295

264

31

Maryland

5,101

2,867

2,235

Massachusetts

15,722

12,712

3,010

Michigan

13,660

12,156

1,504

Minnesota

6,174

5,592

582

Mississippi

235

189

46

Missouri

D

2,818

D

Montana

136

118

18

e

Nebraska

636

601

35

Nevada

638

554

85

New Hampshire

2,069

943

1,126

New Jersey

13,930

11,977

1,952

New Mexico

472

250

223

New York

12,072

9,141

2,931

North Carolina

6,193

5,157

1,036

North Dakota

261

236

25

Ohio

6,993

5,403

1,590

Oklahoma

604

507

97

i

Oregon

4,631

4,415

216

Pennsylvania

9,718

9,018

700

Rhode Island

542

451

91

South Carolina

1,399

949

450

i

South Dakota

136

112

24

Tennessee

1,434

1,279

155

Texas

15,309

12,920

2,388

Utah

2,438

1,874

565

Vermont

374

i

329

i

44

Virginia

5,562

3,138

2,424

i

Washington

14,558

13,659

899

i

West Virginia

247

213

35

Wisconsin

4,053

3,548

505

i

Wyoming

46

e

33

e

13

Undistributed fundsb

D

6,111

D

D = data withheld to avoid disclosing operations of individual companies; e = > 50% of the cell value is imputed due to raking of state data; i = > 50% of the cell value is imputed due to reasons other than raking of state data.

a Includes companies located in the United States that performed or funded R&D.b Includes data reported on Form BRDI-1 not allocated to a specific state. Data reported on Form BRDI-1A, the questionnaire sent to small companies or companies new to the survey, were allocated to the state in the address on the company's survey form, which is usually the company's headquarters.

NOTES: Detail may not add to totals because of rounding. Excludes data for federally funded research and development centers.

SOURCE: National Science Foundation, National Center for Science and Engineering Statistics, Business R&D and Innovation Survey, 2011.

R&D Performance by Company Size

Small companies (5 to 499 domestic employees) performed 19% of the nation’s total business R&D in 2011. In these companies, the R&D intensity was 5.0%, compared with 3.0% for all other companies (tables 1 and 3). Small companies accounted for 13% of sales and employed 19% of those who worked for R&D-performing or R&D-funding companies. Of the 1.5 million R&D employees engaged in business R&D in the United States, 33% worked for small companies. By contrast, mid-size companies (those with 500 to 24,999 domestic employees) performed 46% of the nation’s total business R&D in 2011, and their R&D intensity was 3.0%. They accounted for 50% of sales and employed 44% of those who worked for R&D-performing or R&D-funding companies, including 42% of R&D employees in the United States. The largest companies (25,000 or more domestic employees) performed 35% of the nation’s total business R&D in 2011, and their R&D intensity was 3.0%. The largest companies employed 37% of those who worked for R&D-performing or R&D-funding companies, including 26% of R&D employees in the United States.

Survey Information and Data Availability

The sample for BRDIS was selected to represent all for-profit, nonfarm companies that have five or more domestic employees, that are publicly or privately held, and that perform or fund R&D or engage in innovative activities in the United States. Because the statistics from the survey are based on a sample, they are subject to both sampling and nonsampling errors (see technical notes in the annual reports at http://www.nsf.gov/statistics/industry/).

In this InfoBrief, money amounts are expressed in current U.S. dollars and are not adjusted for inflation. Company is defined as a business organization located in the United States, either U.S.-owned or a U.S. affiliate of a foreign parent, of one or more establishments under common ownership or control that performs or funds R&D.

For 2010, a total of 42,965 companies were sampled, representing 2,013,448 companies; for 2011, a total of 43,108 companies were sampled, representing 1,964,799 companies. The actual numbers of companies in the sample that remained within the scope of the survey between sample selection and tabulation were 39,968 for 2010 and 39,624 for 2011. These lower counts represent the number of companies that were determined to be within the scope of the survey after all data collected were processed. Reasons for the reduced counts include mergers, acquisitions, and instances where companies had gone out of business in the interim. Of these in-scope companies, 71.4% were considered to have met the criteria for a complete response to the 2010 survey; 69.2% met the 2011 survey response criteria. Industry classification was based on the dominant business activity for domestic R&D performance where available. For reporting units that did not report business activity codes for R&D, the classification used for sampling was assigned.

The full set of detailed tables from this survey will be available in the report Business R&D and Innovation: 2011, at http://www.nsf.gov/statistics/industry/. Individual detailed tables and tables with relative standard errors and imputation rates from the 2011 survey may be available in advance of the full report. For further information, contact the author.

[2] Determining the amount of domestic net sales and operating revenues was left to the reporting company, however guidance was given to exclude intracompany transfers and sales by foreign subsidiaries but include transfers to foreign subsidiaries and export sales to foreign companies.

[3] Employment statistics in this InfoBrief are head counts. Full-time equivalent statistics are available in the detailed statistical tables. R&D employees include scientists and engineers and their managers, technicians, technologists, and support staff members who work on R&D or who provide direct support to R&D activities.

National Science Foundation, National Center for Science and Engineering StatisticsBusiness R&D Performance in the United States Increased in 2011
Arlington, VA (NSF 13-335) [September 2013]